White Paper Asserts That Existing Trade Agreements Provide No Data Exclusivity for Biologics

Baker, BrookIn a white paper released earlier this month, Professor Brook Baker of the Northeastern University School of Law argues that current trade agreements do not provide data exclusivity for biologics, and therefore, that the twelve countries negotiating the Trans-Pacific Partnership Agreement (TPP) "can and should apply their minds to potential costs of treaty-mandated biologic exclusivity."  In determining that the data exclusivity provisions of existing trade agreements do not apply to biologics, Prof. Baker (at right) reviewed the North American Free Trade Agreement (NAFTA), which applies to the U.S., Mexico, and Canada, the United States-Peru Free Trade Agreement (US-Peru FTA), the Dominican Republic-Central American Free Trade Agreement (DR-CAFTA), the Korea-United States Free Trade Agreement (KORUS), and the United States-Singapore Free Trade Agreement (US-Singapore FTA).  With the exception of the US-Singapore FTA, which Prof. Baker found to be ambiguous with respect to coverage, all of the other treaties contained data exclusivity provisions that applied only to pharmaceuticals involving new chemical entities (traditional small-molecule, chemically synthesized drugs), and not to pharmaceuticals that do not involve new chemical entities (biologics).

According to the white paper, the absence of data exclusivity provisions in these trade agreements (with the possible exception of the US-Singapore FTA) is significant because the Biotechnology Industry Organization (BIO) and United States Trade Representative (USTR) "want to have it both ways."  On the one hand, they:

[A]rgue repeatedly that biologics are different . . . , that they entail different therapeutic risks, that they are not protected by patents to the same extent as small-molecule medicines, that the research, development, registration, and manufacture of biologics all entail greater uncertainties, and thus that the bio-tech industry need different provisions on data/market exclusivity than that provided with respect to chemistry-based pharmaceutical right holders."

On the other hand, however, they argue that TPP negotiators need not worry about the U.S. proposal for a 12-year data exclusivity period for biologics because some of the countries involved in the negotiations "have already indirectly agreed to data exclusivity on biologics in previously trade agreements."  The white paper concludes that such an argument is "without merit."

Notwithstanding the paper's conclusion that current trade agreements do not provide data exclusivity for biologics, and despite acknowledging that "[t]reating biologics differently from traditional small-molecule, chemically synthesized products makes a lot of sense," Prof. Baker contends that the 12-year exclusivity period provided in the Biologics Price Competition and Innovation Act (BPCIA) is "excessive."  In particular, he advises TPP negotiators that they might want to "consider alerting the U.S. and its public to [the] fact that twelve years of data exclusivity for biologics in the TPP would bind the hands of Congress in the future -- it would lock-in an excessive period of data exclusivity through secret, closed-door negotiations, even while the Obama Administration and certain members of Congress are reconsidering wisdom of the existing legislation," adding that "[d]ata exclusivity for biologics, especially extra-long data exclusivity, is a fool's gamble."  The paper notes that the U.S. is intead expected to propose that a 12-year data exclusivity period for biologics be incorporated into the TPP.

For additional information regarding this and other related topics, please see:

• "BIO Reiterates Support for 12-Year Data Exclusivity Period for Biologics," August 20, 2013
• "Senators Back 12-Year Data Exclusivity Period for Biosimilars and President Obama (Once Again) Does Not," May 9, 2013
• "U.S. Negotiators on TPP -- Don't Trade Away the Biopharmaceutical Research Sector," September 30, 2012
• "Senators Support Inclusion of 12-Year Exclusivity Period in Free Trade Agreement," September 12, 2011
• "House Legislators Lobby to Exclude 12-Year Data Exclusivity Period from Free Trade Agreement," August 11, 2011